Bitwise seeks Avalanche ETF approval in Delaware, heats up Altcoin fund battle

Bitwise Asset Management has filed for the Bitwise Avalanche ETF in Delaware, signaling a growing effort to diversify its regulated digital asset offerings. The filing, dated September 5, establishes a trust structure that would allow the product to track Avalanche’s native token, AVAX, pending further regulatory approval.

For crypto investors, the move highlights Bitwise’s strategy to go beyond its established Bitcoin and Ethereum funds. If approved, the Bitwise Avalanche ETF would offer institutional and retail investors direct exposure to AVAX without the need to hold the underlying asset.

“Bitwise has consistently sought to bring transparent and regulated access to crypto markets,” — Matt Hougan, Chief Investment Officer at Bitwise, said in a recent statement on the firm’s ETF roadmap.

Competition heats up for Avalanche-based ETFs

The Bitwise Avalanche ETF is not the first attempt to bring Avalanche to regulated markets. Earlier this year, asset managers Grayscale and VanEck also filed with the U.S. Securities and Exchange Commission (SEC) for similar AVAX-based exchange-traded products.

Avalanche, developed by Ava Labs in 2020, has been promoted as a blockchain designed to address scalability, security, and decentralization — often referred to as the “blockchain trilemma.” The network’s consensus protocol is capable of processing thousands of transactions per second with settlement times under two seconds, a feature that proponents argue makes it attractive for decentralized finance (DeFi) and enterprise applications.

“The demand for altcoin-focused ETFs reflects investor appetite to diversify beyond Bitcoin and Ethereum,” — James Seyffart, ETF analyst at Bloomberg Intelligence, told reporters earlier this year.

Market context and AVAX performance

The filing for the Bitwise Avalanche ETF comes during a volatile period in the broader crypto market. AVAX, Avalanche’s native token, currently trades at around $24, reflecting a pullback amid market-wide corrections. However, data from CoinGecko shows that the token has still posted a 13% gain over the past 12 months, suggesting sustained investor interest.

As of now, AVAX holds the position of the 23rd largest cryptocurrency by market capitalization, underscoring its role as a mid-tier digital asset with significant potential for growth.

Analysts note that if the Bitwise Avalanche ETF secures approval, it could provide a new pathway for institutional investors who have been hesitant to directly purchase AVAX.

While Bitwise’s Delaware registration marks a critical step, the real challenge lies ahead with the SEC. The commission has historically been cautious with crypto ETFs, only recently approving spot Bitcoin ETFs after years of rejections.

“Approval is far from guaranteed. The SEC will likely weigh liquidity, custody, and investor protection before greenlighting an Avalanche ETF,” — Todd Rosenbluth, Head of Research at VettaFi, explained in a note.

If successful, the Bitwise Avalanche ETF could open the door for other altcoin-focused funds, accelerating the mainstream acceptance of a wider range of digital assets. For now, investors and policymakers alike will closely monitor Bitwise’s next steps as the filing progresses through the regulatory pipeline